The Medical Developments International Ltd (ASX: MVP) share price is drifting deep into the red in early trade on Monday.

At the time of writing, the share trades 17% lower at $1.99 following the release of a company announcement.

What did Medical Developments announce?

The company advised it has successfully completed the institutional components of its planned fully-underwritten $30 million capital raising.

The 1 for 9.5 pro-rata entitlement offer raised $5 million in tranches of an institutional placement and entitlement offer. The company reported good support from existing shareholders.

Meanwhile, the underwritten placement raised approximately $15 million, with a total of 7.5 million new shares issued.

Medical Developments announced the funding round last week. It plans to put the funds towards the company’s expansion into Europe, the Australian ambulance sector, and investment directly into the business.

It now intends to raise a further $10 million through a retail entitlement offer. The offer will open on 11 August and run until 25 August 2022.

Speaking on the announcement, Medical Developments chair Gordon Naylor said:

I would like to thank our shareholders for their support and welcome our new investors onto the MVP share register. Their strong funding support will enable our investment to continue executing on our European and Australian growth strategies.

Further developments will likely be released closer to 25 August when the retail entitlement offer is set to close.

In the last 12 months, the Medical Developments share price is down more than 52%, and 60% this year to date.

The post Here’s why the Medical Developments share price is sinking 17% on Monday appeared first on The Motley Fool Australia.

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More reading

• Medical Developments share price halted amid ‘significant near-term opportunities’

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Medical Developments International Limited. The Motley Fool Australia has recommended Medical Developments International Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Novonix Ltd (ASX: NVX) share price is down in morning trade on Monday despite no news having been released by the company.

Right now, stock in the battery materials and technology supplier is swapping hands for $3.05 apiece after slumping as low as $2.92 in early trade.

For context, the S&P/ASX 200 Index (ASX: XJO) is also in the red today, falling 0.28%, while the S&P/ASX 200 Information Technology Index (ASX: XIJ) has slipped 0.36%.

So, what’s going wrong for the Novonix share price today? Let’s take a look.

What’s weighing on the Novonix share price?

Despite the company’s silence, the Novonix share price is handing back some of its recent gains on Monday.

The stock surged a whopping 13.65% on Friday to mark its highest closing price in eight weeks at $3.08. Like today, there was no news at the time to explain its rise.

However, Novonix’s exceptional day in the green on Friday might explain the losses it’s posting today. It could be a simple case of profit-taking.

And while the stock appeared to overcome a near-two-month lull last week, it’s still a long way from its recent peaks.

The Novonix share price reached an all-time high of $12.47 in December 2021. It’s currently trading 76% lower than it was back then.

But additional respite (or further falls) could come soon enough.

The market expects to hear from the ASX 200 tech stock later this month when it releases its annual report. That’s set to drop on 25 August.

The post Why is the Novonix share price having such a lousy start to the week? appeared first on The Motley Fool Australia.

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• These 3 ASX tech shares had a cracking day on the ASX today
• Here are the top 10 ASX 200 shares today
• Why is the Novonix share price leaping 12% on Friday?
• Here are the top 10 ASX 200 shares today
• Why did the Novonix share price notch up a 24% gain in July?

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 Scott Phillips.

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The Mayne Pharma Group Ltd (ASX: MYX) share price is up 4.48% on Monday morning amid news the company has received US regulatory approval.

Shares of Mayne Pharma are currently trading at 35 cents each after opening at 33.5 cents a share this morning.

That’s currently beating the S&P/ASX 200 Index (ASX: XJO) which is down 0.28%. Meantime, the S&P/ASX 200 Healthcare Index is 0.47% lower.

Let’s check the news from Mayne this morning.

What did Mayne Pharma announce?

Mayne Pharma Group and its Belgian partner Mithra Pharmaceuticals have been granted Food and Drug Agency (FDA) approval for a hormonal contraceptive ring for women that aims to reduce the likelihood of pregnancy.

The device, Holoette, contains the medications etonogestrel and ethinyl estradiol for its contraceptive effects.

It will be a generic alternative to Nuvaring that was approved by the FDA in October 2001.

Nuvaring and other corresponding products on the US market achieved approximately US$580 million in sales for the 12 months ended June 2022.

Mayne Pharma CEO Scott Richards said:

We are very pleased to announce the approval of Haloette in the US and look forward to bringing this drug-device generic to market. Mayne Pharma is proudly committed to providing women with more affordable and accessible contraceptive choices.

The device is the company’s third regulatory product approval with its development partner Mithra.

Mithra’s role is to develop and manufacture Haloette in its facility in Belgium. According to their contract, Mayne Pharma will pay six million euros to the company now the device has received FDA approval. It will pay another 1.6 million euros when the product is sold in the United States.

Mayne Pharma expects that the new contraceptive device will launch in early 2023.

Mayne Pharma share price snapshot

Mayne Pharma shares have gained 17% since the start of 2022 and 13% in the past year.

That’s far outperformed the broader healthcare index. It’s dropped almost 3.2% year to date and 5% since this time last year.

The company’s shares have now gained 21% in just the last month, giving Mayne a current market capitalisation of $608 million.

The post Mayne Pharma share price lifts on FDA approval appeared first on The Motley Fool Australia.

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More reading

• Why is the Novonix share price having such a lousy start to the week?
• Everyone is talking about this stock. Is it a good long-term option?
• Guess which little-known ASX share has soared 110% in 2 days
• Why is the Copper Mountain share price surging 30% on Monday?
• Aurizon share price slips as dividend is cut by 24%

Motley Fool contributor Matthew Farley 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 Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Last month Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) executed a 20-for-1 stock split. In the months leading up to it as well as in the weeks that followed, there has been increased investor discussion about the tech giant. One of the questions being asked is whether Google’s parent company is still a good long-term option for investors? 

I think it could be a good bet over the long haul — the technology company is experiencing solid growth from its core business, and its stock is trading at a better price than in the recent past thanks to 2022’s tech stock sell-off. Let’s take a closer look at why investors should consider buying Alphabet’s stock right now. 

Alphabet’s advertising strength

Alphabet’s total revenue increased by 13% in the most recent quarter (reported on July 26) to $69.7 billion. And while that was slower than pandemic-induced revenue growth in 2021, the company is still a revenue-generating machine in a fast-growing ad market. 

The bulk of Alphabet’s sales come from Google’s advertising business (which includes Google Search, YouTube ads, and the Google Network). In the second quarter sales from this segment grew by 11.5% year over year to $56.3 billion. 

This growth looks even better when you consider that Alphabet has more opportunities to expand in the digital ad market. Some estimates put the global advertising market size at $876 billion in 2026, up from $602 billion this year. 

Alphabet is already a leader in the digital advertising space — it takes the top spot ahead of Meta Platforms, Alibaba, and Amazon in the U.S. — and as the market continues to expand, Alphabet has the potential to expand right along with it. 

Alphabet shares are trading at a discount right now 

You may have noticed that the stock market has been a bit volatile lately, and tech stocks, in particular, have suffered. The tech-heavy Nasdaq Composite index is down 19.5% year-to-date, and Alphabet’s shares have fallen roughly the same amount.  

While that drop isn’t great in the short-term, for long-term investors it’s providing an opportunity to buy Alphabet’s stock at a relative discount. The chart below shows Alphabet’s price-to-earnings over the past several years, with Alphabet’s most recent P/E ratio much lower than in the recent past. 

GOOGL PE Ratio data by YCharts.

When buying a stock, getting it at a relative discount is obviously preferable. With the tech sector down right now and Alphabet’s shares down along with it, investors can snatch up Alphabet shares at a discount.

Alphabet has money to weather an economic storm

It’s important to point out that if the U.S. economy does enter a significant downtown, investors won’t have to worry about Alphabet’s ability to push through it. 

Alphabet has a highly profitable business that generated $12.6 billion in free cash flow in the most recent quarter, and $65 billion over the trailing 12 months. The company’s balance sheet is also in very solid shape, with Alphabet ending the quarter with $125 billion in cash and investments. 

While no company is immune to downturns, this cash would allow Alphabet to continue to paying its debts while also being able to invest in its products and services. 

Don’t forget this is a long-term play

Over the past month or so the tech sector has had a bit of a resurgence, along with Alphabet’s stock. And while that’s good to see, don’t forget that buying shares of Alphabet and holding onto them for at least five years (or more!) is where long-term investing really pays off. 

There will likely be some more share price volatility as investors process new economic data and investors continue to process news about inflation and a potential economic slowdown. 

But with Alphabet already in a very strong position in the advertising space and the company’s shares cheaper than they’ve been in years, this tech stock looks like it could still be a long-term winner. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Everyone is talking about this stock. Is it a good long-term option? appeared first on The Motley Fool Australia.

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• 2 important investing metrics you won’t find on a financial statement
• What’s in store for the BetaShares NASDAQ 100 ETF in the next 12 months?
• Down 23%, should investors buy Alphabet before its stock split?
• Better advertising stock: Alphabet vs. Amazon
• GameStop finally announced its stock split. The MOASS still isn’t coming

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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 Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors.  Chris Neiger has no position in any of the stocks mentioned. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares) and Alphabet (C shares). 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 Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Cardno Limited (ASX: CDD) share price is pushing well into the green today as investors rally the share to its highest mark since 7 July.

At the time of writing, the ASX share is trading more than 37% higher on the day at 89.5 cents apiece, bringing its gains from last Thursday’s close to more than 110%.

What’s driving this ASX share higher?

On 30 June, the company completed the sale of Cardno International Development to DT Global Australia Pty Ltd.

It confirmed the first tranche of the distribution was paid on 14 July to Cardno shareholders. This comprised of a capital return of $9.4 million or 24 cents per share and an unfranked dividend of 78 cents per share.

The company then announced last week that the second tranche of the distribution is expected to be paid in two parts – first on 22 August, with the balance of this settled by September 2022.

It now has to figure out what the next steps will be after finalising the remaining distribution payments from the Cardno International Development sale.

Noteworthy, however, is that the company is set to wind down its wholly-owned subsidiary, Sustentable, formerly known as Caminosca.

This business [Sustentable] is involved in a number of court actions that may lead to between US$0 and US$15 million of recoveries and has between US$0 and US$200 million of contingent liabilities depending on the outcome of various legal actions.

The Cardno Board has received advice that it is unlikely that these contingent liabilities will affect the listed Cardno holding company, but that they may affect the potential for future recoveries from this wind down business. There remain costs associated with these legal actions.

Further updates are expected in the coming weeks to months per the language in the report.

In the meantime, the Cardno share price is down 91% in the past 12 months.

The post Guess which little-known ASX share has soared 110% in 2 days appeared first on The Motley Fool Australia.

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More reading

• Why is the Novonix share price having such a lousy start to the week?
• Mayne Pharma share price lifts on FDA approval
• Everyone is talking about this stock. Is it a good long-term option?
• Why is the Copper Mountain share price surging 30% on Monday?
• Aurizon share price slips as dividend is cut by 24%

Motley Fool contributor Zach Bristow 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 Scott Phillips.

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The Copper Mountain Mining Corporation (ASX: C6C) share price is off to the races today, up 30%.

The ASX copper share closed on Friday trading for $1.66 and is currently trading for $2.16.

Here’s what looks to be piquing ASX investor interest.

What’s driving the ASX copper share higher?

With no fresh news out, the Copper Mountain share price looks to be joining in with the broader rally among ASX copper shares.

The Sandfire Resources Ltd (ASX: SFR) share price, for example, is up 8% at the time of writing.

And copper mining focused giant Oz Minerals Limited (ASX: OZL), with a market cap north of $8.5 billion, is soaring an eye-popping 35%.

So, why is the Copper Mountain share price soaring alongside the other ASX copper shares?

The answer lies with Oz Minerals.

This morning Oz Minerals reported that it had rejected a takeover offer from BHP Group Ltd (ASX: BHP).

In an unsolicited, conditional and non-binding indicative proposal, BHP sought to acquire Oz Minerals for $25 per share in cash. Oz Minerals shares closed on Friday trading for $18.92 and have now leapt above BHP’s offer price to trade for $25.60.

Oz Minerals’ board unanimously rejected BHP’s takeover proposal, saying the offer undervalued its shares and wasn’t in the best interests of shareholders.

Commenting on the decision to reject the offer, Andrew Cole, Oz Minerals CEO said:

We have a unique set of copper and nickel assets, all with strong long-term growth potential in quality locations. We are mining minerals that are in strong demand particularly for the global electrification and decarbonisation thematic and we have a long-life Resource and Reserve base. We do not consider the proposal from BHP sufficiently recognises these attributes.

While still trading well above pre-COVID levels, copper prices have come down from highs of US$10,674 per tonne in early March this year to US$7,781 today. The red metal dipped as low as US$7,170 in mid-July.

But with a longer-term horizon in mind, the Oz Minerals board clearly believes those prices will come back up. And that’s certainly been good news for Copper Mountain shareholders today.

Copper Mountain share price snapshot

Despite today’s big bounce, the Copper Mountain share price remains down 42% in 2022, compared to a year-to-date loss of 9% posted by the All Ordinaries Index (ASX: XAO).

The post Why is the Copper Mountain share price surging 30% on Monday? appeared first on The Motley Fool Australia.

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More reading

• The OZ Minerals share price is rocketing 35% after BHP bid
• BHP share price lifts as $8.3b takeover bid rejected
• OZ Minerals share price on watch after miner rejects BHP’s $25 per share takeover offer
• BHP share price has ‘drifted into attractive value territory’ with 25% upside: broker
• The iron ore price has slumped 10% in 5 days. Here’s how ASX 200 mining shares have responded.

Motley Fool contributor Bernd Struben 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 Scott Phillips.

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The Aurizon Holdings Ltd (ASX: AZJ) share price is falling today on the back of the company’s FY22 results.

Aurizon shares are currently trading at $3.80, a 6.06% fall. In comparison, the S&P/ASX 200 Index (ASX: XJO) is falling 0.28% today.

Let’s take a look at what the freight operator reported today.

What did the company report?

Highlights of the results include:

• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.468 billion, down 1% on prior comparable period (pcp)
• Underlying net profit after tax (NPAT) down 2% on pcp to $525 million
• Statutory NPAT fell 15% to $513 million
• Revenue of $3.075 billion, up 2% on pcp
• Final fully-franked dividend of 10.9 cents per share, down 24% on pcp
• Free cash flow surged 13% to $664 million

What else happened in FY22?

Aurizon’s coal business delivered an EBITDA of $541 million, up 1% on the pcp. This was despite coal tonnages dropping 4% compared to 2021. A better yield on contracted tonnes and lower track access, train crew and maintenance costs contributed to this result.

The company’s network business EBITDA fell 6% on the pcp. Despite higher coal demand, volumes on the Central Queensland Coal Network slipped 1% to 206.5 million tonnes. Wet weather and COVID-19 contributed to this result.

Aurizon’s bulk business revenue dropped 7% to $130 million. Volumes were lower due to the impact of floods, COVID, and reduced production from some customers.

The company finalised the acquisition of One Rail Australia in July 2022. Aurizon predicts this will increase revenue and tonnages for the bulk business in the future.

Commenting on the outlook for One Rail, Aurizon CEO Andrew Harding said:

One Rail is a high performance business with a highly-capable workforce. The acquisition provides the
platform for the next phase of growth for Aurizon, as we aim to double earnings in our bulk business by 2030.

What did management say?

Further sharing his insight on the results, Harding added:

The company has delivered a solid operational and financial result despite a challenging year with the ongoing COVID-19 pandemic, major flooding events and customer-specific reductions in production impacting our volumes.

Group earnings have remained stable through continued strong operational performance and a number of revenue protection mechanisms that are in place. This underlines the strength and resilience of the Aurizon business, and a commitment to deliver shareholder returns.

The total dividend for FY2022 represents a yield of over 5%. Including this final dividend, Aurizon has returned to shareholders $4.8 billion over the past seven years through dividends and share buybacks.

What’s next?

Aurizon is forecasting an EBITDA of between $1.47 and $1.55 billion in the 2023 financial year. This includes 11 months of impact from the One Rail bulk business.

The company said sustaining capital expenditure is between $500 and $550 million.

Aurizon share price snapshot

The Aurizon share price has jumped nearly 9% in the year to date, but it has slipped 6.5% in the past year.

Aurizon has a market capitalisation of more than $7 billion based on today’s share price.

The post Aurizon share price slips as dividend is cut by 24% appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Aurizon share price sinks despite ‘transformative’ acquisition win
• Why Aurizon, Bega Cheese, Flight Centre, and Lake Resources shares are sinking

Motley Fool contributor Monica O’Shea 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 recommended Aurizon Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The OZ Minerals Limited (ASX: OZL) share price has shot higher to be the best performer in the S&P/ASX 200 Index (ASX: XJO) at the time of writing.

OZ Minerals shares are currently trading for $25.51 each, a 34.83% leap from their previous close of $18.92 a share.

It comes as BHP Group Ltd (ASX: BHP) has offered a takeover bid of $25 cash per OZ Minerals share.

BHP’s bid represents a premium of 32.1% compared to the last closing price of OZ Minerals shares last week.

According to OZ Minerals, BHP has accumulated an interest in OZ Minerals through derivative instruments, amounting to a holding of less than 5%.

After considering the offer, the OZ Minerals board decided the offer “significantly undervalues” the company and rejected it.

OZ Minerals pointed out the offer represents a premium of just 13.1% to the volume weighted average price for the last six months.

Management response

OZ Minerals managing director and CEO Andrew Cole said:

We have a unique set of copper and nickel assets, all with strong long-term growth potential in quality locations. We are mining minerals that are in strong demand particularly for the electrification and decarbonisation thematic and we have a long-life resource and reserve base. We do not consider the proposal from BHP sufficiently recognises these attributes.

OZ Minerals pointed out here is a “strong long-term outlook” for both the copper and nickel markets underpinned by increasing geological scarcity, global electrification, and accelerating decarbonisation. It says it’s highly leveraged to this and is exploring for more deposits.

OZ Minerals share price snapshot

Since the start of 2022, OZ Minerals shares are still down 9% despite the huge rise today.

The company has a current market capitalisation of approximately $8.5 billion.

The post The OZ Minerals share price is rocketing 35% after BHP bid appeared first on The Motley Fool Australia.

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More reading

• BHP share price lifts as $8.3b takeover bid rejected
• Is the Northern Star share price on the way back up?
• Could inflation now be fully priced in to ASX 200 shares?
• OZ Minerals share price on watch after miner rejects BHP’s $25 per share takeover offer
• Is Coles an underrated ASX 200 dividend share with potential?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Suncorp Group Ltd (ASX: SUN) share price is in the red in early trade on Monday after the insurer released its FY22 results. At the time of writing, Suncorp shares are trading 3.26% lower at $11.27 apiece.

It was a mixed set of results for Suncorp, with revenue increasing 14% year on year whilst natural hazards played havoc on the company’s bottom line.

Meanwhile, it also saw headwinds from volatility in the financial markets this year, resulting in a $190 million loss in its investment markets division, down from $453 million the prior year.

What’s next for Suncorp?

The company also recognised a 34% decrease in net profit after tax (NPAT) to $681 million. Chiefly, this reflects natural hazard (insurance-related) costs and volatile financial markets.

For instance, 35 separate weather events during the year resulted in a $101 million blowout to the group’s provision for natural hazards.

Suncorp also declared a 17 cents per share final dividend – well below the 46 cents that consensus analyst estimates had forecast.

It wasn’t all bad news, though. As The Motley Fool reported earlier today: “…as the company holds its fixed interest investments to maturity, the majority of these FY 2022 accounting losses are expected to unwind to profit over the coming periods.”

Suncorp also reiterated its FY23 earnings targets and forecasts a cost-to-income ratio of approximately 50% by the end of next financial year.

Despite this, investors seem less than impressed following the update and have pushed the share more than 3% lower from the open today.

The Suncorp share price now trades back in line with key support ranges formed since June, as seen on the chart below. Returns against the S&P/ASX 200 Financials Index (ASX: XFJ) this year to date are plotted as well.

Suncorp shares are down around 5% for the last 12 months, although they have pushed back 2% into the green this year to date.

The post Suncorp share price slides following softer-than-expected FY2022 results appeared first on The Motley Fool Australia.

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More reading

• Suncorp share price on watch after FY22 profit falls 34%
• 5 things to watch on the ASX 200 on Monday
• Why has the Suncorp share price gone backwards since the ANZ takeover news?
• Here are the top 10 ASX 200 shares today
• What might the ANZ deal mean for Bank of Queensland shareholders?

Motley Fool contributor Zach Bristow 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 Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

E-commerce stocks aren’t getting much love these days. The ProShares Online Retail ETF is down 59% from highs set in February 2021. E-commerce giant Amazon (NASDAQ: AMZN) has done better a bit better but still has seen its stock price drop into correction territory. Shares of the tech giant are down 24.5% from all-time highs set last summer. Compare that with the 20.3% drop in the tech-focused Nasdaq-100, and you’ll see that investors are wary of tech growth stocks and the e-commerce sector specifically.

Amazon reported its second-quarter earnings on July 28, giving investors an update on the direction of its business moving forward in this volatile time. Let’s review the tech behemoth’s existing situation and see if it offers any clues on whether Amazon stock is a smart investment today.

After e-commerce blossomed at the start of the pandemic, a reopening economy has brought more consumers back into brick-and-mortar stores, putting pressure on online shopping platforms. And while Amazon has diversified its business over the years through categories like Amazon Web Services (AWS), Amazon Prime, and digital advertising, the company’s top line is still largely dominated by online retail.

How goes it for the e-commerce leader?

In its latest quarter, Amazon’s top line overall sales climbed 7.2% year over year to total $121.2 billion. On the bottom line, Amazon reported a rare net loss of $0.20 per share, marking the second consecutive quarter of being in the red. As is the case with many other e-commerce companies at the moment, the primary cause of the loss was ongoing macro headwinds, including high inflation related to sharp rises in fuel, energy, and transportation costs.

Sales in Q2 from Amazon’s e-commerce segment fell 4.3% year over year to $50.9 billion. E-commerce sales account for about 42% of total sales for the quarter. The drop can partially be attributed to tough comparisons to a strong Q2 in 2021. Even so, growth for the e-commerce leader was uneven, and it’ll likely take an improvement in the economic environment for Amazon to get growth levels back to their five-year norms. 

Its closely watched Amazon Web Services cloud platform saw sales surge 33.3% to $19.7 billion, while its subscription services and advertising services categories expanded 10.1% and 17.5%, respectively, up to $8.7 billion and $8.8 billion. It was a pleasant surprise to see its advertising segment perform so well, given that ad-driven tech companies like Snap and Meta Platforms have struggled of late.

For the full fiscal year, Wall Street analysts expect the company’s total revenue to increase 10.6% year over year to $519.5 billion, and its earnings per share to decline a whopping 80.9% to $0.62. In fiscal 2023, which is when year-over-year comparable metrics will come back to earth, analysts are forecasting top- and bottom-line growth of 15.8% and 303.2%, respectively.

Amazon management wasn’t inclined to offer an update of full-year guidance with this latest report, but it did discuss what it expects for the third quarter. Management said net sales in Q3 would total $127.5 billion at the midpoint and grow 15% compared to Q3 2021. The guidance was tempered by concerns about unfavorable foreign exchange rates. Operating income is expected to be positive and hit $1.75 billion at the midpoint, compared with $4.9 billion in Q3 2021. This guidance doesn’t account for business acquisitions, restructurings, or legal settlements, including the just-announced acquisition of Roomba robot vacuum maker iRobot for roughly $1.7 billion. 

What should investors do?

For investors with extended time horizons, Amazon stock remains a fail-safe long-term bet. Whenever the market falls out of love with a best-in-class stock, smart investors should interpret that as a clear buying opportunity. That’s what we’re watching unfold these past few months with Amazon — the e-commerce company has confronted a string of headwinds, all of which are primarily short-term in nature. Hence, long-term investors can profit from this current sell-off by accumulating shares of the e-commerce leader today. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Should investors pounce on Amazon stock during the Nasdaq tech sell-off? appeared first on The Motley Fool Australia.

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More reading

• Amazon stock shrugged off bad news: Here’s what that means for investors
• Amazon share price surges 13% after hours on revenue beat
• The genius move Amazon shareholders have been hoping for
• Want to invest in management teams like Amazon’s? Here’s what to look for
• 2 important investing metrics you won’t find on a financial statement

Luke Meindl has no position in any of the stocks mentioned.  John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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